US regulators are reportedly increasing their scrutiny on European fund managers doing business in the US amid fears over the pricing of illiquid assets, reported Financial Times.
The probe comes as part of the Securities and Exchange Commission’s move to verify the pricing of certain assets and manage increasing investments by retail investors in hedge funds and other alternative investments.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The publication said that SEC is mainly focusing its probe on the valuation of assets such as collateralised loan obligations that are technically marketable and thin traded.
A senior figure at SEC managing insurance-linked securities said: "They have not done much internationally but I suspect they will be coming pretty regularly. They met six or seven managers in London. I think we will find increasingly that the SEC will say.
"We need to look people in the eye and ask if they have the right motivation. Coming and doing more inspections of firms that are UK regulated but SEC registered will become more commonplace," he added.
In December 2013, The Securities and Exchange Commission has charged GLG Partners and levied a penalty of $9 million over allegation of internal controls failures that led to the overvaluation of a fund’s assets and inflated fee revenue for the firms.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
